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The 2002 Budget contained a proposal to be effective from a date after the Royal Assent to the Finance Bill 2002 which was the 29 July 2002.
HMC&E Business Brief 23/02 has deferred the implementation date. The changes will now apply to supplies made on or after 1 January 2003. This will mean that the first adjustments under the new clawback will not take place until 1 July 2003. For supplies made before 1 January 2003 the existing rules on notification and clawback will remain.
The good news is that the new arrangement will enable a business to claim the relief without writing to their debtor customer advising them that a claim has been made.
The bad news is that any business that has made a claim for input tax on a supply, but has not paid the supplier of the goods or services within six months of the date of supply (or the date on which payment is due if later), must repay such input tax. Imagine the assessments VAT inspectors will be able to raise for input VAT not repaid - together with interest and penalties?
See also VAT Planning, VAT Flat Rate Scheme, VAT Returns, VAT Capital Goods Scheme, VAT Car Fuel Scale Charge, VAT Cars including Leased Cars, VAT Partial Exemption, VAT Registration Numbers, VAT Retail Schemes
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 1 September 2002.